The United States’ government knows how valuable small businesses are in the country’s economy. Because of that, they’re more likely to do business with small businesses rather than larger enterprises. However, with their limited resources, some businesses may have a hard time fulfilling some government contracts. That is why most of them apply for government contract financing before taking on this big opportunity.
Government contracts are a great way to boost your business sales and grow your business. If you’re participating in a government bidding or planning to, you have to understand how the process works first. Here are the steps you need to do to participate in government contracts:
Step 1. Ensure that Your Small Business Matches SBA’s definition of a “Small Business”
Before you can participate in any government biddings, the first thing you have to do is to ensure that your business fits that of the government’s definition of a small business. Depending on what industry you’re in, you may have to follow a different guideline. In general, the SBA may define a small business based on the average number of employees for the past year or the business’ average annual receipt for the past three years. You also have to determine your North American Industry Classification System (NAICS) code which classifies businesses according to the product or service they provide.
Other than that, your business should also meet the following general guidelines:
- Must be a for-profit organization
- The business must be located within the United States and operates primarily in the country
- Is independently owned and operated
- Must not be dominant in the industry on a national basis
Step 2. Obtain Your Dun & Bradstreet (DUNS) Number
The DUNS number is a nine-digit business classification number for your business’ physical location. When applying for a DUNS number, you won’t have to pay for anything or buy anything from Dun & Bradstreet unless you wish to. The processing for your DUNS number may take less than a day. However, you have to make sure that your business is registered with the government.
When applying for a DUNS Number, you will have to submit the following requirements:
- Business’ legal name
- Contact name and number
- Business address
- Mailing address (if different from main or business address)
- Doing Business As (DBA)
- Number of staff on each of your business’ physical location/s
Step 3. Register Your Business with the System for Award Management (SAM)
Once you have your DUNS number, use it to register your business with SAM. The System for Awards Management (SAM) is the federal government’s database for contractors. Any government agency uses this database when finding a contractor that will help them fulfill orders or services. By registering your business in SAM, you’ll increase your business’ chances of winning government contracts that are solely awarded to small businesses. Aside from that, having your business on the SAM database also certifies that your business is eligible for government contracts.
SAM also lets you create a business profile for free. You can fill out any required information like your business name and the description of your business. Be sure to use accurate information and make your business appealing to contracting officials. This will make your business easily visible to government agencies and significantly increase your chances of winning government contracts.
Step 4. Search for Active Government Contracting Opportunities
Now that your business is registered and ready to participate in government biddings, the next step is to explore active contracting opportunities. You can do this by searching for listings on the following platforms:
- Federal Business Opportunities (FedBizOpps) is a government platform that provides small businesses with active government listings. You will have to register to participate in open bids.
- The Government Services Administration (GSA) Schedules Program allocates approximately $50 billion annually for federal procurement. A major portion of that budget goes to small businesses. You can search for its subcontracting directory for open bids and opportunities.
- SUB-Net also provides a list of contracting opportunities (both government and non-federal agencies) for small business owners. The platform is widely used by non-profit organizations, universities, and even foreign governments to look for solicitations or identify small businesses.
Pro tip: If you’re still starting on government contracting, consider becoming a subcontractor for an experienced government contractor. This is a good way to learn the ins and outs of government contracting so that by the time you land a big contract, you’ll be an expert on the process.
Secure Your Business’ Future by Applying for Government Contract Financing
Working with the federal government presents a promising opportunity for small businesses. While the process of winning government contracts can be long and time-consuming, once you gain access to these government opportunities and win some government contracts, you’ll be giving your company a fighting chance in competing with larger companies in your industry.
If you’re worried about where to get the resources needed to fulfill the contract, you can opt to apply for government contract financing. There are a lot of financing companies that are willing to help and guide you through the process. Be sure to do your research first when planning to apply for financing for your small business.
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